Update on McMenamin’s two new properties in Washington

For some time now we have been tracking the progress (or lack thereof) on two new McMenamins properties in Washington state. First, the historic Elk’s Temple in downtown Tacoma, which McMenamins bought in 2009. Second, the historic Anderson School building in Bothell, which the company purchased in 2010. Today we have learned why these two projects have been delayed for so long.

According to a report in yesterday’s Tacoma News Tribune (read it), the problem is money. More specifically, McMenamins has yet to find investors for the projects. For the first time, the company is pursuing outside partners for its projects. Considering the company’s successful track record, you’d expect private investors to jump at the opportunity.

Given the fact that McMenamins has already done this 55 times, you might be wondering why it is now, for the first time, seeking outside investment in new projects. Both of these endeavors promise to be expensive. An estimated $20 million for each property. That’s nothing new, but in this post-recession economy, institutional financing is a bit tricky and McMenamins has already spent over $4 million to purchase the properties.

Mike and Brian McMenamin have been converting historic properties for three decades, rescuing (in many cases) dilapidated, forgotten buildings and creating destinations that are unique and fun. The company’s 55 properties are not just hotels and restaurants, but often include breweries, distilleries, wineries, and other sorts of “fun for grown-ups.” The company operates properties in Oregon and Washington, employing 2,000 people and enjoying annual revenues of $119 million.

Exactly why investors are thus far uninterested in these projects is a mystery. Likely, they have not visited a McMenamins property to witness firsthand the expertise with which the company resurrects historic properties. They save cool, old buildings and transform them into something that people love. They create jobs and bolster local economies. All good stuff.